CBC 2014: Brewers & Wholesalers on Fostering Relationships

Brewers and distributors joined panel discussions at this week’s Craft Brewers Conference in Denver, Colo. to explain strategies for successfully nurturing a fruitful relationship within the three-tier system.

At the small and independent distributor panel, conducted by representatives from wholesalers in North Carolina, California, and Illinois, the emphasis was placed heavily on the need for distributors to keep their books “cool” and maintain a unique portfolio.

Brad Johnston, founder of North Carolina’s Tryon Distributing, said because his company maintains a very specialty oriented book, he is able to attract the industry’s most reputable brands.

“We stay in the cool and specialty brands so customers see us as the experts in the category,” he said. “When somebody starts thinking craft they think Tryon because of the image we’ve been able to build.”

He added that this type of selectiveness is required too because of the sheer finite capacity of both shelf space in retail and also floor space in his own warehouse.

Jason Mussetter, of Mussetter Distributing Inc. of Sacramento, Calif., reiterated that sentiment. His wholesaler, from its founding in 1976 on up through 2010 distributed Miller, Corona, and Heineken products before selling off those brands and diving headlong into craft.

“It’s gone from really quantity to quality,” he said.

As such, he said in order to succeed, wholesalers must be choosy, telling the crowd that unless yours is a renowned award winner, an IPA is no longer enough to secure space in a distributor’s portfolio, despite it being the best-selling style.

“What makes yours unique versus the others that we have in our portfolio?” he said. “We make an effort to take on brands that do not trip over our other thriving brands. Right now, brands brewing session style beer, creative concoctions, unique ingredients and interesting styles [are good].”

Jerry Glunz, of the 126-year-old Louis Glunz Beer Inc., of Chicago, IL, said education is key to understanding how to be properly selective.

“There’s a language to craft beers,” he said, adding, “ Education is key to segment growth.”

Then it was the brewers turn as representatives from Shmaltz Brewing Co., Uinta Brewing Co. and Terrapin Beer Co. dispelled the notion that going a mile wide with distribution entails going only an inch deep, and instead encouraged attendees to go both deep and wide should they so choose.

Of course, that’s easier said than done. Steve Kuftinec, vice president of sales with Utah’s Uinta Brewing, noted that resources must match any given brewer’s vision.

“You might want to be in 50 states, but If you have limited resources that’s going to be extremely difficult,” he said. “If you’re landlocked at a smaller facility that’s going to be extremely difficult.”

This type of forecasting, he said, is especially important when dealing with investor’s money.

“You can’t really say you’ve got a 20-year plan because they’ve got a 5-year plan,” he said.

Echoing the words of the distributors that spoke before them, Jeremy Cowan, founder of Shmaltz Brewing said that in order to go wide, the beer must be remarkable it a company expects to find a home in any wholesaler’s book.

“Go wide with something unique, special, high margin, or otherwise I guarantee you are screwed,” he said. “Why would you go wide? Because you’re making world class exceptional beers that are very hard to track down.”

But if brewers attempt to go wide with their distribution, they must acknowledge that relationships with wholesalers are unique on a state-by-state basis, said Dustin Watts, vice president of sales and marketing at Terrapin.

“What works great for United [Distributors Inc.] in Atlanta might not be the same with what works with Tryon,” he said.

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